How LlamaFinancial Reached 5 Paying Customers at $69 a Month in 2022 (Interview with CEO Filippo Burattini)

Introduction and Company Overview

Nathan Latka

00:00Hey folks, my guest today is Filippo Burattini. He is the founder of LlamaFi and Sturpy, helping founders and SaaS companies grow and scale by reducing churn and improving LTV. Filippo, are you ready to take us to the top?

Filippo Burattini

00:13>> Yeah. Let's go.

LlamaFi vs Sturpy: Which Does More Revenue

Nathan Latka

00:14Alright. So just to be clear, which one is which? Which one does more revenue? LlamaFi or Sturpy?

Filippo Burattini

00:18>> LlamaFi. Yeah. LlamaFi does churn reduction and LTV boosting, and Sturpy is for financial modeling.

Nathan Latka

00:26So Okay. Very good. The

Filippo Burattini

00:28>> Founder space.

How LlamaFinancial Reduces Churn with a Code Snippet

Nathan Latka

00:29So tell me how you attack helping sort of SaaS companies reduce churn and improve LTV. How does your software work?

Filippo Burattini

00:35>> Yeah. So basically, it's a code snippet, very lightweight that you style on your website. And when a customer goes to cancel, they usually click cancel button and it's just a model asking for a confirmation and we take it from there. So we go through a quick survey and we try to understand the main reasons. So first step is understanding the problem. Then with the insight, you can fix them. But also we can do some custom offers

01:04>> for the user depending on his answers to those questions.

Early Users and What the Team Is Learning

Nathan Latka

01:09I see. And how many customers do they have installed this code snippet on their website?

Filippo Burattini

01:15>> Yes. So we are prelaunch now, basically. So we are just doing some we have some users. So we have around five to 10 users that are actively using it with the business. Yeah.

Nathan Latka

01:28So what are you learning? You got your first five to 10 users to install the snippet. What are you learning?

Filippo Burattini

01:33>> So, yeah, we are learning that actually other SaaS companies have the same issues as we do because Llama Financial actually, developed it for us. So it was a tool that we added to to Sturpy to manage our churn, like at least to know why people were canceling, which is a big blind spot sometimes. And then we decided to package it and to sell to others. And yeah, we see that most founders don't know why people are

02:05>> canceling. They're more focused around product onboarding, which is totally understandable. And so they are liking it a lot, like getting to know why is cool.

Team Size and Equity Split

Nathan Latka

02:16So you built for yourself, which is great. How many engineers, like what's the total team size just on LlamaFi?

Filippo Burattini

02:21>> Yeah. So we have a small team. We have three. Two people here in Italy, me and a coworker, and then we have a co founder in US.

Nathan Latka

02:30And does the same does the do you three own both Sturpy and LlamaFi?

Filippo Burattini

02:34>> Yes.

Nathan Latka

02:35>> Yep.

02:35Ah, okay. And what? You split equity evenly amongst the three of you or no?

Filippo Burattini

02:38>> No. So one of us is actually like an employee, like a contractor, and the two me and the guy in America, John, big shout out to him. We have like a kind of fifty-fifty. I own a bit more because I started it before he joined.

Nathan Latka

02:5755 for you, 45 for him. Right?

Filippo Burattini

02:59>> Yeah.

Nathan Latka

03:00All right.

Sturpy Revenue and Customer Count

Nathan Latka

03:01That's cool. You're using this on when did you realize churn was an issue at Sturpy? Like, I mean, can you share, like, what does the revenue that Sturpy does?

Filippo Burattini

03:09>> Yeah. So Sturpy is also not that big of a revenue. Like, we have around 500 MRR, but it's big revenue per account, we have more users, let's say, than a typical

Nathan Latka

03:27How many customers are on Sturpy?

Filippo Burattini

03:29>> I think around I don't remember now, but let's say more than 100.

Nathan Latka

03:36Yeah. Okay. So they so if you're doing 500 a month in revenue across a 100 customers, each one pays about $5 a month?

Filippo Burattini

03:46>> Yeah. Okay. No. Let's say it's more like $10 a month, $9.99. You know, you experiment $9.99, $15 around the price range. So we change price over time, of course. Like, we're always experimenting.

Nathan Latka

03:59Oh, what's going on there, YouTube? Good to see you guys. Now imagine this, you love watching these interviews with SaaS founders, but imagine if we took all of the valuation data out from over 2,807 interviews I've done manually saves you a lot of time. Well, we've done this, we've built it into the beautiful interface inside of Founderpath. Check this out.

Filippo Burattini

04:19>> I'll show you how you

Nathan Latka

04:20can access this in a second. But you log in, you connect your Stripe account, you see your valuation real time, you can see what it changed over the past eighty eight days and even set goals for valuation this year. Now the secret evaluation is there's many different ways to value a SaaS business. So the reason you're gonna see three or four different valuations inside of your Founderpath dashboard, this is all free by the way, is because

04:43depending on who's doing the buying of your SaaS company, you're gonna get a different valuation. A VC is gonna pay a different valuation, Private equity firm is different. If you're gonna do a minority sale, that's different. And if you sell the whole business, that's a different valuation. You can see all those when I hover over here. Right? So the teal is what a VC would pay. Yellow is what private equity and red is if you sold

05:06the whole thing outright. Now what's cool about this is this is not built off random data. Again, you guys hear these interviews on YouTube. All these datas are built from real time valuation data points founder share with us on the show. So traction 1,200,000 seed round 3.7 raise. They sold 22% of their business. Go in here and filter by the event. Maybe you only wanna see companies that have sold the whole business. Well, here are a

05:30bunch that have been acquired the valuation and the multiple. Maybe you're going out right now and you're raising your seed round. We'll go in here and look at all this recent seed deals that went down, what they raised, what valuation they raised at and what percent that they sold. There's never been a larger dataset of SaaS valuations than what you can get now inside of Founderpath. And we're thrilled to bring it to you. All right. We're

05:55gonna go back to the YouTube video here in a second. But if you wanna check this tool out, if you wanna jump in and sign up, you can check it out for free to get your valuation at this link, this link, founderpath.com/products/valuations. Or if you go to founderpath.com and hover over products, click on get your valuation here, and go ahead and sign up to give it a whirl. Again, all that valuation data live right inside the

06:20platform. I hope to see you there. Alright. Let's jump back into the interview. Okay. But a 100 a 100 customers, $500 a month in monthly recurring revenue, you're going churn's an issue. How do we solve it? You built a tool for yourself.

Building the Churn Survey Tool Internally

Filippo Burattini

06:32>> Yeah. Exactly. We wanted to know why people were leaving and instead of doing like manual outreach, sending the email which no one responds and stuff like that. We decided I mean, we have an engineering team in house. Let's just build a quick survey. And, yeah, that worked pretty well. We

Nathan Latka

06:49How long did it take to build the the JavaScript code for Stripe Readin?

Filippo Burattini

06:53>> Oh, okay. So building for us was week like one week or maybe. Yeah, we have a good engineering team then but then packaging it and transforming into a solution that can work for others, took a bit more like a couple of months maybe.

Nathan Latka

07:08I see. So how many survey responses have you gotten using Llama Financial and Sturpy so far?

Filippo Burattini

07:18>> Oh,

07:19>> say like 20 maybe.

Nathan Latka

07:22Okay.

07:23And how does it work? I mean, are they do you give them like a multiple choice answer or they can type Yeah. In a

Filippo Burattini

07:30>> Absolutely. You try to give them multiple choice answers and the options that you provide them are usually things that you want to like that you have a sense that might be an issue. That's also what we recommend to our users. If you know that you might have an issue with customer support, let's say, documentation, you try to give those options to the user. And yeah, so you ask those And you also, of course, leave the option

07:56>> to have an open answer, but then it's harder to extract the data out of an open answer.

Nathan Latka

08:02Yeah. So what are the three top responses you're getting right now from people when they say they cancel?

Filippo Burattini

08:08>> Yeah. So main one for us, which is very specific to our case, is like we no longer need it. Because like imagine a financial model that you need, you do it once, maybe you check it every couple of months, but it's not something that you spend a lot of time on.

Nathan Latka

08:25Yeah. But isn't that not a useful answer for you? Because I mean, everyone's just gonna say we don't need it. I mean, but they do need it. If they have a SaaS company, they're gonna have a churn every month. They need it. Right? They just don't they're not getting value from it.

Filippo Burattini

08:36>> And I'm talking about Sturpy. Sorry.

Nathan Latka

08:39Oh, sorry. Sorry. Sorry. Got it. Got it.

Filippo Burattini

08:40>> Yeah. So the main answer is for Sturpy. Yeah. I see. I see. Yeah. No. My bad. My bad. Yeah.

Nathan Latka

08:46So it's financial model. They do it once, which is what Sturpy is, and then they cancel.

Filippo Burattini

08:50>> Yeah. Exactly.

Nathan Latka

08:51Yeah. What's the second most responded answer?

Filippo Burattini

08:53>> The second most is I like I don't know how to use it, basically, which means so far as means, okay, there's a problem around either onboarding, documentation. So we started rolling out like YouTube videos. So each time you go into a page, you get a YouTube video that explains like a one minute video.

Nathan Latka

09:12I see. And so tell me more about what you and the team want to build. It sounds like you've built a nice little SWAT team that moves quickly. You can launch products fast, right? To launch a product fast and get your first dollar revenue is very different than going from, you know, a dollar in revenue to a $100,000 a month in revenue. Are you guys sort of like a product studio? You're just going to keep launching

09:31products like this to go from zero to one?

Product Studio vs Focused Startup

Filippo Burattini

09:33>> Not really. So this is like maybe a me issue. Like, I always like building things and having a short attention span maybe is not the best when you try to do a startup, but it's cool. You explore a lot of different topics and a lot of skills you can use them in various different areas. But that is definitely the biggest strength that we have. So moving fast and having a good technical foundation so we can tackle

10:03>> problems quickly. And this also means that yeah. We can play around with products a bit more quickly so we can get an MVP up and running in months.

Nathan Latka

10:17So what's the focus right now? Llama Financial or Sturpy?

Filippo Burattini

10:21>> Kinda both.

Nathan Latka

10:22You're only three you're only three people. How can

Filippo Burattini

10:25>> you focus on both? Absolutely. Yeah. Yeah. No. So me, I'm more focused around Llama because I I developed it and I want to see, like, if it's easy to scale. And while John is more focused around Sturpy and seeing how it could scale. And then we we have kind of a deadline. Let's see. Not to be a competition because we help each other, of course, but, basically, let's see what other market responds to which one

Nathan Latka

10:52Why not build these tools and sell them? I mean, you could probably go sell LlamaFi right now for for, you know, $10,000 or $20,000, then move on and focus on or sell Sturpy, sorry, for like $20,000 and focus on LlamaFi.

Filippo Burattini

11:04>> Yes. We are not really looking to sell. We we kinda like what we do. Like, we started both of them because we like the the problem. And so we enjoy the the building process and whatnot. Yeah.

Nathan Latka

11:17Yeah. But I mean, how do you pay your bill? I mean, just to be direct, how do pay your bill?

Filippo Burattini

11:20>> Yeah.

11:22>> No, I actually got a bit lucky with a mobile app that I remember when I said like I like building products. So one of my mobile apps has done quite well. So I managed to get some good revenue from that and I was completely passive. So ad revenue and it keeps

Nathan Latka

11:37What's the app called?

Filippo Burattini

11:40>> It's very niche, it's very strange. So like a bit embarrassing. Do you want to know? I don't know if it's available in your sales. Yeah.

Nathan Latka

11:48Well, what's the what's the name of the app? What does it do?

Filippo Burattini

11:52>> It's it's freaking manga. I don't know if you know about manga.

Nathan Latka

11:56Japanese comics. Yeah. Okay. So Japanese comics. And what what so people that read Japanese comics download it to read those comics?

Filippo Burattini

12:03>> Yeah. Exactly.

Nathan Latka

12:04Yeah. And you make money every time someone downloads?

Filippo Burattini

12:07>> No. I make money when I show ads to the users, and I make money based on ads impression. Yeah.

Nathan Latka

12:14I see. I see.

Filippo Burattini

12:15>> And But that's I guess like a horrible business to be in because, like, you're basically an employee of Google, Apple, and you're a provider. Yeah.

Nathan Latka

12:23Yeah. When did you launch that app?

Filippo Burattini

12:26>> Probably like three, four years ago.

Nathan Latka

12:29How many downloads does it have?

Filippo Burattini

12:32>> So I have a rather bit of some problems with Google and Apple because, I mean, they are very not fun to work with, let's say. And so they got the app down, then I had to upload another one. But combined, all the apps have like 1,000,000 downloads.

Nathan Latka

12:48I see. Okay. So like, I mean, I just don't know anything about apps. I mean, how much money can you make from a million downloads?

Filippo Burattini

12:54>> Oh, not much at all. Absolutely. I mean, depends depends very much on the monetization strategy that you use, but for an app like mine, which I think is like most common type of app, so free app and you see ads every once in a while. So imagine all the games basically.

13:14>> The ad revenue per impression is very bad. Like I think it's like 0.000, so four zeros, one per like thousands impressions.

Nathan Latka

13:30So you're making how much a month from this application?

Filippo Burattini

13:33>> Like a 100 Yeah.

13:34>> So in my best month, I was doing seven to eight ks.

Nathan Latka

13:38Okay.

Filippo Burattini

13:39>> Yeah. So I mean, it's not much, but it's good to run myself.

Nathan Latka

13:43But that's part, that's a key part of your story, right? Because that is why you can spend time on Llama and Sturpy because this other thing makes you money.

Filippo Burattini

13:50>> Yeah, exactly. That thing makes money and allows me to focus completely. I left my full time job and I can do this.

Five Paying Customers and Pricing

Nathan Latka

13:59Understood. Back to LlamaFi real quick. So just to be clear, you have five users right now, but no paying customers yet, right?

Filippo Burattini

14:06>> Oh, no. Those five are paying.

Nathan Latka

14:09What do they pay per month?

Filippo Burattini

14:11>> They pay 69.

14:13>> $69, $70 a month?

Nathan Latka

14:14Oh, okay. So you're doing $350 per month on Llama?

Filippo Burattini

14:19>> Yeah.

Nathan Latka

14:20Ah, this is great. Okay. So you have some this is good. You have some you have some revenue. Is it sticky? Are you getting good feedback? Are you thinking

Customer Stickiness and Acquisition Challenges

Filippo Burattini

14:27>> Yes. Yes. No. It's sticky. I mean, one cool thing about Llama that we kind of learned for Sturpy is like having a different type of problem making churn problem is very sticky. As you were saying before, like if you have a SaaS business, have churn every month. That's just the name of the game. So it's like once we get a user to install it and put it in their website, it's very sticky.

Nathan Latka

14:52Yep. I see. Okay. Very cool. This makes a lot of sense. How are you getting new customers?

Filippo Burattini

14:57>> Yeah. That's where I suck at, quite honestly.

Nathan Latka

15:01I mean, how'd you get a million downloads on your manga Japanese app

Filippo Burattini

15:04>> That's what I ask myself every time. I actually no. Mean, yeah. So app game is very different. So you are in a marketplace, so it's more structured and there is things that you can do, things you can do. And so, yeah, the time.

Nathan Latka

15:21I see. See.

Filippo Burattini

15:22>> Yeah, yeah.

Nathan Latka

15:23Well, is exciting. There's three of you on the team, you're doing $350 per month. I mean, how does your co founder make money? Mean, did you guys raise capital or is it bootstrapped?

Bootstrapped and Founder Funding Strategy

Filippo Burattini

15:31>> No, completely bootstrapped. Had a big conversation before we decided to do this and we basically said that neither

15:43>> of us will get anything from the company until it starts making revenue, like significant revenue.

Nathan Latka

15:50Okay. Makes good sense.

Competitive Landscape and Differentiation

Filippo Burattini

15:51>> Now, is also a very competitive space.

Nathan Latka

15:53There's a lot of companies that do this Churnkey, Brightwheel, ProfitWell, there's a lot.

Filippo Burattini

15:59>> What do you think you What can

Nathan Latka

16:05do differently than all these other players, right, to grow your customer base?

Filippo Burattini

16:10>> Yeah. So that's true. We have a lot of there is honest competition and ProfitWell being the leader, I'd say, like the industry leader in this space.

Nathan Latka

16:21I mean, zero is much larger in terms of revenue than ProfitWell.

Filippo Burattini

16:26>> Yeah. Yeah. Yeah. Absolutely. But I'll say that in terms of how SaaS companies, like how churn reduction software is approaching the issue. And

16:41>> what we do like the main differentiating factor is that we also have built in into the software. So with the same code snippet, also get LTV boosting and ARPA boosting, which is basically converting people from monthly to annually and upselling customers to one plan to the other.

Nathan Latka

17:04How do you help them do that? With the code snippet, how do you help people upsell someone from $5 a month to $30 a month?

Filippo Burattini

17:09>> Yeah. So basically you can score users every time they do an action that you want to reward. So let's imagine a paid Instagram. Every time a user posts something, I want to score it. I say, okay, score it five. And once it reaches like 50 as a score, then that is like an up lead and I can try to upsell it.

Nathan Latka

17:34I see.

Filippo Burattini

17:35>> Yeah. So we also built that into the app, which we don't see others.

Nathan Latka

17:40Well, it's a great story. And just because you launched LlamaFi this year, right? Or last year?

Filippo Burattini

17:44>> No, it's actually not even launched yet. We are very much

Nathan Latka

17:47Well, when did you first write the first line of code for it?

Filippo Burattini

17:52>> Yeah. No, it's this year. Definitely, like three months ago, four months.

Nathan Latka

17:56Okay. Very cool. Well, listen, come back on in six months. Give us an update. Okay?

Filippo Burattini

18:00>> Yeah, sure. Alright.

Famous Five Rapid Fire Questions

Nathan Latka

18:01Let's wrap up here with the famous five. Number one, last book that you read.

Filippo Burattini

18:05>> Okay.

18:06>> So last book that I read was actually from Brandon Sanderson, The The Way of Kings. Fiction book.

Nathan Latka

18:14Number two, is there a CEO you're following or studying?

Filippo Burattini

18:19>> Not really like deeply following, but I like the guy from Valuetainment. Patrick

Nathan Latka

18:30Sorry, from which company? Valuetainment?

Filippo Burattini

18:32>> No. Valuetainment is the name of the, like, the YouTube channel that he has.

18:37>> I see. Got it. Yeah.

Nathan Latka

18:38Number number three, what's your favorite online tool for building a business?

Filippo Burattini

18:43>> I'm not a big online tool users, honestly. Like Notion, maybe. Notion is pretty useful. Trello. Notion and Trello.

Nathan Latka

18:49Okay. Number four. How many hours of sleep do get every night?

Filippo Burattini

18:52>> Eight. It's a must.

Nathan Latka

18:53And what's the situation for people? Married? Single? Kids?

Filippo Burattini

18:56>> I'm single. Yeah.

Nathan Latka

18:57Okay. And how old are you?

Filippo Burattini

18:59>> 25.

19:00>> 25.

Nathan Latka

19:01Last question, something you wish you knew when you were 20.

Filippo Burattini

19:05>> Wow.

19:08>> What I wish I knew, maybe that the world is much bigger than what you realize. And there are a lot of people doing cool things even at an early age. So like I think 18 is like people are already building businesses and doing crazy things. So like 20 years old, you should already be going.

Closing Summary and Wrap Up

Nathan Latka

19:29Guys, you haven't. Filippo made his first money on a Japanese comic app. His best months, he does 7 to $8,000 a month there, over a million downloads, but said, you know what? Not into this. Launched Sturpy, called a year, two years ago, which is financial modeling for SaaS companies, doing $500 a month there in revenue. But said, what, churn's an issue. Let me build a tool to solve that. That tool is now called LlamaFi, llamafinancial.com.

19:50They've got five customers signed up, paying an average $70 per month. Their first $350 a month in revenue, which we love. They're seeing it be sticky. They're seeing it get used. They built us with a team of three, all totally bootstrapped. Rooting for you, Filippo. Thanks for taking us to the top.

Filippo Burattini

20:02>> Thanks to you, Nathan.

Nathan Latka

20:06One more thing before you go. We have a brand new show every Thursday at 1PM Central. It's called Shark Tank for SaaS. We call it deal or bust. One founder comes on, three hungry buyers, they try and do a deal live and the founder shares back end dashboards, their expenses, their revenue, ARPU, CAC, LTV, you name it, they share it and the buyers try and make a deal live. It is fun to watch every Thursday 1PM

20:31Central. Additionally, remember these recorded Founder interviews go live. We release them here on YouTube every day at 2PM Central. To make sure you don't miss any of that, make sure you click the subscribe button below here on YouTube, the big red button and then click the little Bell notification to make sure you get notifications when we do go live. I wouldn't want you to miss breaking news in the SaaS world, whether it's an acquisition, a big

20:53fundraise, a big sale, a big profitability statement or something else. I don't want you to miss it. Additionally, if you want to take this conversation deeper and further, we have by far the largest private Slack community for B2B SaaS founders. You want to get in there. We've probably talked about your tool if you're running a company or your firm if you're investing. You can go in there and quickly search and see what people are saying. Sign

21:15up for that at nathanlatka.com/slack. In the meantime, I'm hanging out with you here on YouTube. I'll be in the comments for the next thirty minutes. Feel free to let me know what you thought about this episode and if you enjoyed it, click the thumbs up. We get a lot of haters that are mad at how aggressive I am on these shows, but I do it so that we can all learn. We have to counter those people.

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